Singapore Sting

Singapore’s stock exchange felt it needed to clarify the issue. “Media commentaries” had noticed that the share price of agricultural trader Olam International had a nearly 40% run-up in the six weeks before a group led by Singapore state fund Temasek announced a bid for the company. Others noticed, too, including Carson Block of Muddy Waters, who had previously fingered Olam as a fraud—accusations it vociferously denied.

“The stock has inexplicably outperformed in the past month,” Mr. Block said in an email.

Faith as a grain of mustard seed (apparently not one of Olam’s commodities) can move a mountain.

It’s worth noting that Olam’s analysts haven’t been terribly good at predicting the stock’s direction. Even after all those upgrades, the consensus target was only 1.68 Singapore dollars (US$1.33), according to FactSet, just a single Singapore cent higher than at the start of the year and far below the S$2 the stock hit just before the deal was announced. Back in November 2012, before Mr. Block’s accusations, analysts had a consensus of S$2.33. The stock then plunged to S$1.40, not reaching that consensus price, ever. Temasek’s buyout bid is priced at S$2.23. Nobody said explaining markets is easy, but this begs another look.